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Managing Disruptions in a Project Driven Supply Chain

In the recent years pangs of supply chain disruptions have been felt by almost every industry. Devastating Tsunami in Japan and severe flooding in Thailand in 2011 had crippled Automotive, semiconductor and electronics Industries - the ripple effect was far reaching, it impacted every strata of supply chain. Enterprises came under the assault of significant supply shortages that led to lost sales, missing revenue targets and left the consumers high and dry. Besides natural disasters, supply chain disruptions may stem from various reasons such as political uprising, security breaches, or simply financial meltdown of key supplier(s).

 In a project driven supply chain, where OEMs provide both equipment and installation services the problem is further compounded due to interdependence between project plan and supply chain plan. The tighter both the plans are integrated, the better prepared is the OEM to withstand the disruptions. Identification of critical path and assessing the feasibility of meeting milestone dates are key aspects of project planning. Generally delivery of key components/equipment is mapped to milestone dates in the Project Plan. When disruptions occur supply chain planners would immediately publish the information about delayed supplies from supply chain planning system to Project planning system and alert project planners to assess the impact in the project plan. In the event delays eat up the float available in the plan, project planners may seek alternate option from the supply chain planners. Such interactions could happen back and forth and it calls for a seamless integration between Project Planning system and Supply Planning system.  Besides collaboration capabilities supply chain planners will require rapid simulation capabilities to identify alternate sources and transportation options.   Meeting the due date is not the only criteria that the planner checks, he/she needs to evaluate and choose the most cost effective option as well. Further to absorb and buffer intensity of disruptions, supply chain planners may evaluate the level of safety stock and inventory optimization strategies (refer to my previous blog on Inventory Postponement).

It wasn't until recently that the supply chain practitioners and strategists realized the importance of building resilience in the supply chain.  Underlying IT solution plays a pivotal role to create and foster a resilient supply chain. A well designed and developed IT solution can provide conduits for collaboration and information sharing, rapid simulations, and Business Intelligence to quickly recover from the disruptions.


There is no denying the fact that with uncertainities all around the need to managing disruptions is much more than ever. Couldnt agree more with the Author.

Thanks Amit; Failure to address disruptions can no longer be justified with the excuses for unforeseen events. Supply chain network design, selection of systems and tools need to factor in ability to handle disruptions. The need for collaboration, information sharing and simulation has never been felt more than ever before.

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